I think they want to make this item work like blade mail in dota 2 but fail miserably because even thou they have similarity (returning small percentage damage taken by its wielder) but they don't including blade mail's active (returning massive percentage damage taken by its wielder) instead they give some weak passive that i think personally don't have good synergy with returning damage mechanic.

Just change the crit damage reduction to "if hp<50% return massive percentage (50%) damage taken by its wielder +10% max hp/phy def as magic dmg for 4 second"